Sterling rallied to fresh highs against the dollar and the euro before retracing in the afternoon. The markets will look towards the housing data and construction figures released today for influence; however, the main focus will remain on Thursdays Bank of England interest rate and asset purchasing decisions.

The euro had a poor day yesterday weakening off against the majority of currencies as Euro wide unemployment figures reached the highest level in more than 14 years. Moreover, weak manufacturing data released did little to help the single currency gain any positive momentum. The region will look towards the final fourth quarter GDP figures for 2011 which are released today; if worse than expected, the data could further reinforce the sentiment that the Euro zone is in recession.

In the US, better than expected manufacturing growth data released yesterday was clouded by figures showing that construction spending had unexpectedly dropped in February. Today, the Federal Open Market Committee (FOMC) meeting minutes for March are released which often causes volatility in the market as the detail can give investors some indication of which course of action the central bank may take in the upcoming months.

Elsewhere, the strong manufacturing data from China released over the weekend meant the commodity backed currencies had a strong start to the day; but there was a great deal of volatility as heavy trading was influenced by data released elsewhere. Extremely poor retail sales figures for Switzerland were released yesterday; but, the manufacturing data showed an unexpected expansion. The main news out today is from Australia where retail sales data and the official bank rate announcement were released first thing this morning.